Drop noticed in NZ dollar following gains

ANZ

It has appeared that the New Zealand dollar rose near yesterday's 9-1/2-month high against the greenback; however, thereafter it plunged very quickly.

The kiwi was purchasing US65.71c by 8am, from US65.95c at 5pm yesterday. According to data by Reuters, it hiked at US66.26c.

ANZ specified in its morning briefing notes that the positive equity market in the United States inspired moves for the NZ dollar overnight.

But the kiwi failed to break new ground, after which most gains were reversed.

ANZ said: "The correlation between currencies and US stocks appeared to break down."

Since sellers remained confident, lower corrective moves were possible in the coming week; and new ground was unlikely again for today for the NZ dollar.

The US dollar and euro remained dependent against the yen, among the majors. This happened optimism about the economy was suggested by the upbeat US corporate results and housing data, which also dented safe-haven demand for the Japanese currency.

A little headway was made by the NZ dollar against the euro overnight, which locally opened with a slip to 0.4628 from 0.4632 at 5pm.

"The kiwi was at 62.44 yen at 8am from 62.10 at the local close, and against the Australian dollar opened locally at A80.55c, the same as its level at 5pm. The trade weighted index fell to 61.51 at 8am from 61.62 at 5pm," said a source.

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